Perspective: Obama's deal-changer on the sequestration

Misunderstanding, misstatements and all the classic contortions of partisan message management surround the sequester, the term for the $85 billion in ugly and largely irrational federal spending cuts set by law to begin Friday.

What is the non-budget wonk to make of this? Who is responsible? What really happened?

The finger-pointing began during the third presidential debate last fall, on Oct. 22, when President Barack Obama blamed Congress. “The sequester is not something that I’ve proposed,” Obama said. “It is something that Congress has proposed.”

The White House chief of staff at the time, Jack Lew, who had been budget director during the negotiations that set up the sequester in 2011, backed up the president two days later.

“There was an insistence on the part of Republicans in Congress for there to be some automatic trigger,” Lew said while campaigning in Florida. It “was very much rooted in the Republican congressional insistence that there be an automatic measure.”

The president and Lew had this wrong. My extensive reporting for my book “The Price of Politics” shows that the automatic spending cuts were initiated by the White House and were the brainchild of Lew and White House congressional relations chief Rob Nabors — probably the foremost experts on budget issues in the senior ranks of the federal government.

Obama personally approved of the plan for Lew and Nabors to propose the sequester to Senate Majority Leader Harry Reid, D-Nev. They did so at 2:30 p.m. July 27, 2011, according to interviews with two senior White House aides who were directly involved.

Nabors has told others that they checked with the president before going to see Reid. A mandatory sequester was the only action-forcing mechanism they could devise. Nabors has said, “We didn’t actually think it would be that hard to convince them” — Reid and the Republicans — to adopt the sequester. “It really was the only thing we had. There was not a lot of other options left on the table.”

A majority of Republicans did vote for the Budget Control Act that summer, which included the sequester. Key Republican staffers said they didn’t even initially know what a sequester was — because the concept stemmed from the budget wars of the 1980s, when they were not in government.

At the Feb. 13 Senate Finance Committee hearing on Lew’s nomination to become Treasury secretary, Sen. Richard Burr, R-N.C., asked Lew about the account in my book: “Woodward credits you with originating the plan for sequestration. Was he right or wrong?”

“It’s a little more complicated than that,” Lew responded, “and even in his account, it was a little more complicated than that. We were in a negotiation where the failure would have meant the default of the government of the United States.”

“Did you make the suggestion?” Burr asked.

“Well, what I did was said that with all other options closed, we needed to look for an option where we could agree on how to resolve our differences. And we went back to the 1984 plan that Senator Phil Gramm and Senator Warren Rudman worked on and said that that would be a basis for having a consequence that would be so unacceptable to everyone that we would be able to get action.”

In other words, yes.

But then Burr asked about the president’s statement during the presidential debate, that the Republicans originated it.

Lew, being a good lawyer and a loyal presidential adviser, then shifted to denial mode: “Senator, the demand for an enforcement mechanism was not something that the administration was pushing at that moment.”

That statement was not accurate.

On Tuesday, Obama appeared at the White House with a group of police officers and firefighters to denounce the sequester as a “meat-cleaver approach” that would jeopardize military readiness and investments in education, energy and readiness. He also said it would cost jobs. But, the president said, the substitute would have to include new revenue through tax reform.

At noon that same day, White House press secretary Jay Carney shifted position and accepted sequester paternity.

“The sequester was something that was discussed,” Carney said. Walking back the earlier statements, he added carefully, “and as has been reported, it was an idea that the White House put forward.”

This was an acknowledgment that the president and Lew had been wrong.

Why does this matter?

First, months of White House dissembling further eroded any semblance of trust between Obama and congressional Republicans. (The Republicans are by no means blameless and have had their own episodes of denial and bald-faced message management.)

Second, Lew testified during his confirmation hearing that the Republicans would not go along with new revenue in the portion of the deficit-reduction plan that became the sequester.

Reinforcing Lew’s point, a senior White House official said Friday, “The sequester was an option we were forced to take because the Republicans would not do tax increases.”

In fact, the final deal reached between Vice President Joe Biden and Senate Minority Leader Mitch McConnell, R-Ky., in 2011 included an agreement that there would be no tax increases in the sequester in exchange for what the president was insisting on: an agreement that the nation’s debt ceiling would be increased for 18 months, so Obama would not have to go through another such negotiation in 2012, when he was running for reelection.

So when the president asks that a substitute for the sequester include not just spending cuts but also new revenue, he is moving the goal posts. His call for a balanced approach is reasonable, and he makes a strong case that those in the top income brackets could and should pay more. But that was not the deal he made.

■

Woodward is an associate editor of The Washington Post. His latest book is “The Price of Politics.” His assistant, Evelyn M. Duffy, contributed to this commentary.

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Even if the sequester goes into effect we will spend 15 billion more this year than last. It's like getting your proposed pay raise reduced. You're still getting more money. Obama is just playing chicken little.

This whole “sequestration” thing is a joke, and a very bad joke at that! First of all it amounts to a mere 2.4% of the projected spending. There are NO real cuts to actual spending, just a REDUCTION in the amount of growth over the current level of spending. Actual spending will still INCREASE in the next fiscal year, even with this modest reduction. Everything King Obama the Incompetent has said about the upcoming Armageddon is pure unadulterated BS!

Stop to think that EVERY taxpayer had their own 2% reduction in income due to the FICA tax being restored as of the first of this year. You will incur more reductions due to the rising costs of Obamacare, rising energy prices and the resultant rise in everything else that has to be delivered to your local stores. What did/will you do to absorb the reduction in income or to offset these upcoming rises in expenses? Did/will you go without food for one day a week? Did/will you not heat your home in the winter or cool it in the summer? Did/will you deprive yourself or your family of needed medical attention? Of course not! Living in the real world, you had/have to make choices of what non-essential expenses to cut. Perhaps cut a trip to the movies, not renting that DVD or going out for a pizza once a month. Then you can only hope that the government will make the same rational choices. I'm not betting the farm on that approach, however. I'm betting that King Obama the Incompetent will make as many Draconian cuts as he can, simply BECAUSE he can!

A couple of suggestions might be to stop the extravagant parties by GSA personnel and perhaps do what they are supposed to do and sell some of the surplus buildings they have in their inventory that are no longer being used. This will have a two-fold positive result by bringing cash into the US Treasury plus all this property will be removed from the local municipalities' tax-exempt rolls thus bringing them the cash they need to run their local governments. Another suggestion would be for the USDA to stop these idiotic “diversity training” sessions costing hundreds of thousands of dollars paid to some jerk who is telling the gathered employees to repeat “The Pilgrims were illegal aliens.” and similar type rubbish.

Even the DoD can afford to take the hit, if it is done wisely! For starters, do not let any more “cost plus” contracts for anything. Make them all “fixed price” contracts. If a supplier cannot successfully calculate how much they should charge for a contract, perhaps they need better financial people on their payroll. If they screw up, they eat the difference and maybe the next time they'll do a better job of calculating their costs and anticipated profit! Of course, any modifications made to the original contract by the government would require a new negotiation, but, again, being a fixed price. Now the $300.00 hammer would cost $292.80 which is still not a shabby profit for the supplier!